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LATEST ARTICLES
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It seems difficult to convince investors that higher bank profits are sustainable.
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AT1s rallied on news that UBS will redeem a key deal in January. But with refinancing costs higher than coupon re-sets, the pressure now passes to other big banks.
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The European Central Bank has radical suggestions for ending AT1 conversion triggers and allowing only profitable banks to pay coupons. This could make these instruments riskier than equity.
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A second large AT1 deal this year shows increased investor confidence around the bank’s transformation, but timing the deal was tricky.
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European bank shares have rallied even though the pain of loan losses still lies ahead. It is also not clear how they will repay emergency ECB funding
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Banks in Europe face a bleak choice. They can redouble cost cutting and capture the move to digital. They can also top up capital with AT1s, for which there is still a bid. But as the acute phase of the crisis now approaches and loan losses rise, banks’ fabled capital strength faces a stern test
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The AT1 market has grown to almost $200 billion equivalent, with perhaps $20 billion equivalent of net new issuance to come from banks filling P2R buckets with lower-quality capital than CET1.
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One intriguing sub-plot of a wild year in bank capital has been the advent of green AT1 and tier-2 deals.
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As it presses ahead with restructuring, Deutsche will exit cash equities, cut back in rates and centre itself on a traditional corporate banking business. CEO Christian Sewing calls it the most radical transformation the bank has undertaken in decades.
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Additional tier-1 (AT1) securities and contingent convertible capital instruments, known as CoCo bonds, absorb losses when the capital of the issuing financial institution falls below a supervisor-determined level. Here we explain everything you need to know about these hybrid securities, a key plank in bank-resolution plans, and implications for issuers and investors.
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The bizarre communications management of the announcement prompts more head shaking than the actual event itself.
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New investigations into the troubled bank evoke bad memories.
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AT1 contingent capital bonds are entering their second generation; issuers have begun refinancing the $200 billion asset class, but just two years ago the market looked close to collapse. What took it to near disaster? And how did it escape?
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What to do when questions are being asked about the effectiveness of low-trigger CoCos? Issue higher trigger ones, of course.
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Talk of exchange-traded funds offering exposure to additional tier-1 debt may not be as worrying as it sounds
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An investment fund focused on banks with a slant on Europe and Italy might sound like a recipe for disaster, but Davide Serra of Algebris tells a story of market-beating returns and snowballing AuM, and thinks the best times lie ahead.
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A textbook case, a long-inevitable state bailout and a brazen political fudge: Europe’s BRRD has had something of a rough ride this summer. As the region’s banks brace themselves for the capital-raising marathon that is MREL, are the new resolution regulations actually doing more harm than good?
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As a self-described ‘insider-outsider’ at UniCredit, Jean Pierre Mustier has transformed the image of Italy’s biggest bank – inside and out – over an extraordinary 12 months as CEO.
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Bank warns on AT1 coupon if €13 bln rights issue fails; move highlights importance of capital increase.
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Deutsche crisis hits AT1 bonds again; new trigger language needed.
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Investors dump Deutsche after CFO funding boast; Fears spread to other bank stocks.
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It’s easy to blame technical factors and investors’ misunderstanding of the new AT1 market for February’s sharp sell-off across the bank sector, but investors may have a firm grasp of the fundamentals.
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Secondary yields rise above cost of equity; bankers pin hopes on lack of alternatives.
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Subordinated debt meltdown raises capital questions; investors and issuers ‘don’t know’ how bail-in works.
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Flight to AT1 from high yield expected; tier 2 needed to mitigate ALAC impact.
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New AT1 deals from Chinese and UK challenger banks; TLAC securities “must appeal to fixed income investors”
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A November rush to market is anticipated, but there are signs of a flight to quality by investors.
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Lloyds LME highlights potential risks to investors of early regulatory calls in the booming AT1 market
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Lloyds’ liability management exercise (LME) highlights the potential risks to investors of early calls.